Certificate of loan repayment, subtleties of its receipt
It allows the client to make sure that the bank has no claims against him and that the loan has been paid in full. Not all borrowers take a certificate of repayment when repaying a loan, referring to the fact that they have kept cashier's checks, and they do not need an extra document. Our article tells about the advisability of obtaining a certificate, the basic rules for filling it out and the features of the early repayment procedure.
The certificate is a document certifying the full fulfillment of the borrower's obligations under the specified loan. It allows the borrower to defend their rights and interests, and to avoid a deterioration in the borrower's credit rating.
In some cases, after the loan is closed, the borrower may begin to be bothered by the employees of the collection department of the bank, or collection agencies, and report the presence of a debt to the organization.
The certificate is the only legal document capable of proving the correctness of the borrower in court.
Why you need to take a certificate:
- If the bank, where the client has fully repaid the loan, has not transferred information about the closure of the agreement to the Bureau of Credit Histories (BCH), then a new loan may be refused. In the eyes of the new creditor, the lack of data on the fulfillment of previous obligations can be regarded as an assumption of delay or evasion of debt repayment.
- The certificate will help to make sure that the loan debt has been repaid in full. If there are unpaid kopecks left under the contract, they can easily grow up to several thousand rubles. The borrower, in addition to the cost of paying the penalty interest, will face a worsening credit history. The certificate will allow you to prove to the creditor that the debt was repaid on time, and act as a proof document in court.
- If the loan is repaid through payment terminals or electronic systems, there is a risk that the funds will be transferred to the account of the agreement with a delay. To exclude delays and make sure that you have paid in full, order a certificate of repayment from a bank specialist.
- In case of early repayment of the loan, the certificate will help to avoid disputable situations with the bank. If a bank specialist announced a specific amount on the date of early repayment, part of the money could have gone to pay for additional services, and therefore the loan is not completely closed. As a result, interest will continue to accrue, and in the event of a delay - fines. If the borrower does not timely learn about the current debt, there is a likelihood of a worsening credit history and an increase in the cost of servicing the loan.
- If the bank ceases to operate and the rights are transferred to another organization on the assignment, controversial issues may arise. The bank to which the rights were transferred can detect any delays and charge them with penalty interest. The certificate will confirm that the borrower has fulfilled his obligations in good faith.
To obtain a certificate of repayment of the loan, you must apply with a passport to the bank branch where the loan was issued. Some banks are reluctant to issue certificates, referring to technical failures in the program or various problems. In this case, the client can seek help from the judicial authority.
Each borrower, after the loan has been repaid, has the legal right to receive a document. The certificate can be taken not only on the day of loan repayment, but also later, if such a need arises.
Unfortunately, the law does not specify the requirements for the procedure for issuing a certificate. Some lenders can drag out the time and issue the document after a certain period of time, for example, after 30-60 days.
The order of issue differs from bank to bank. Some banks issue immediately after the full amount of the debt is paid, others consider the client's application after a certain period.
What does a loan closing certificate look like?
There is no single template for filling out a repayment certificate. The certificate must contain the following information:
- The date the document was written.
- Full name of the bank.
- Outgoing document number.
- Borrower's passport information indicating the place of registration.
- Loan amount with specification of interest.
- Bank details.
The certificate must be signed by an employee of the credit department and certified by the seal of the bank. The certificate indicates the fact of full repayment of the debt, and the absence of claims against the borrower. A sample of VTB Bank certificate.
Each bank develops its own form of reference. The document is issued free of charge, however, some banks set restrictions on the time frame for the free provision of the certificate. Some organizations charge a fee for the urgency of the issue. In any case, the borrower has the right to leave an application for a document for an unlimited period of time.
The loan account is closed automatically, so the borrower does not need to submit a separate application. If we are talking about a credit card, then the certificate must indicate the closure of the account. Otherwise, the credit card may be reissued automatically, and the service fee will be deducted from the credit limit of the card. The certificate is handed out to the borrower, or sent by mail.
To whom the certificate can be issued
The right to obtain a certificate is not only for the main borrower, but also for the persons participating in the transaction under the loan agreement.
The help can be taken by:
- Title borrower and co-borrowers. Mortgage loans involve the involvement of a spouse / and the main borrower as a co-borrower. After the debt is repaid, co-borrowers can request a certificate of repayment legally.
- Guarantors. The responsibility to pay off the debt lies equally with the borrower and his guarantors. If the information about the closure has not been received by the BCH, then it will be problematic for the guarantor to issue a loan for his own needs. Therefore, the guarantor can request a certificate, regardless of whether the main borrower has already taken it or not.
- Pledger. If the property of a third party was pledged during the registration of the loan, then the pledger must obtain a certificate to remove the encumbrance from the pledge.
In the case of a mortgage loan, a certificate will be required to remove the encumbrance from the acquired property. Until the encumbrance is removed, all transactions with property are prohibited.
Early repayment certificate
In some cases, borrowers repay loans ahead of schedule. Perhaps the client has free money that he can use to pay off the debt, or he wants to close the loan and take a new loan. Regardless of the reasons, early repayment will save on overpayments and get rid of loan obligations.
Before that, the client clarifies with the bank the exact amount to close the contract on the current date. At the same time, each bank has requirements for early repayment.
If you wish to repay the loan ahead of schedule, the borrower must notify the lender in writing. In some banks, an application must be submitted in advance, for example, 30 days in advance, in others it is allowed to repay the loan on the day of notification.
What are the requirements of the bank for early repayment:
- Banks can impose a moratorium on early repayment. At the same time, the law provides for the right of the borrower to pay off the debt ahead of schedule for any loan term.
- Without prior submission of an application for early repayment, only the amount that must be paid on the repayment date according to the schedule will be debited from the borrower's account. The rest of the funds will remain in the account until the next write-off date. In this case, the debt will not be paid in full, and interest will continue to accrue on the remaining debt. To avoid misunderstandings, and to make sure that early repayment has been made, ask for a certificate from a bank employee.
- The bank can make an early repayment only on the planned payment date according to the schedule. Therefore, if the client has deposited the entire amount, he can receive a certificate only after the payment has been debited.
Early repayment of a car loan or mortgage loan allows you to save not only on overpayments, but also on property and life insurance programs of the borrower.
- Keep all documents on making payments on the loan: checks, receipts. It is recommended to keep the certificate for three years, so that in the event of claims from the bank, the borrower can defend his case.
- If the creditor refuses to provide the document, feel free to go to court. Perhaps, in this way, negligent lenders are wasting time in order to issue an invoice for an overdue loan in a few months.
- Carefully read the rules of early repayment in a particular bank. Specify the information about the deadline for accepting an application for early repayment of the loan, the amount and date of debiting funds. This will save time and effort, and get rid of unnecessary red tape and hassle.
Be sure to ask for help. This document will become the guarantor of calmness and impeccable reputation. Even if the loan amount was small, and you repaid it in a short time, do not neglect this procedure. Not only banks, but also microfinance organizations are required to issue a certificate of absence of debt.
The rules for early repayment of the loan in the following video:
Sep 15, 2018 Help manual
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